This Document Contains Chapters 5 to 8 Chapter 5 Strategic Workforce Planning A. OVERVIEW This chapter provides an overview of the human resource planning process from the strategic perspective. The major objectives of HR planning include environmental analysis and staffing issues, as well as strategic coherence to organizational objectives for all HR activities and systems. Aggregate planning anticipates future employee needs and skills need to maintain high performance. Succession planning involves identifying critical organizational management positions and developing a plan to provide a successor when the job is vacant. Both types of planning practices facilitate efficiency in HR policies, practices and procedures. Mentoring is discussed as a key element of human resource planning and a model presented for an effective mentoring program. B. LECTURE OUTLINE I. OPENING CASE – PROCTOR & GAMBLE Proctor & Gamble traditionally hires at the entry level and promotes from within. Its “Build from Within” program tracks the performance of every manager in the organization and maps out areas for development. Each of the organization’s 50 highest ranking positions typically has three internal candidates ready for promotion at any time. This program has resulted in tremendous loyalty among P&G employees. The organization prides itself on being able to fill any open position within the organization “in an hour” and requires that all executives teach in the organization’s training programs. II. INTRODUCTION HR strategy involves taking organizational strategic goals and objectives and translating them into a consistent, integrated, complementary set of programs and policies for managing employees. HR management strategy begins with human resource planning, which involves making assumptions about the future, and must be flexible. Staffing, training, performance, management, compensation, labor relations, and employee separation are derived from human resource planning. To facilitate flexibility, key decision makers must clarify and write down all assumptions about the external and internal environments, which assist with subsequent intervention and corrective action. The U.S. Bureau of Labor Statistics estimates, during the current decade, the civilian labor force with increase by only 1 percent, and the retirement of baby boomers will slow the growth to only two tenths of a percent until the year 2025. Thus, human resource planning will be a critical component of organizational success. See Human Resource Planning at Drexel Heritage Furnishings and Human Capital Management at United States Postal Service examples. III. OBJECTIVES OF HUMAN RESOURCE PLANNING A. Five major objectives of HR planning (Exhibit 5.1) 1. Prevent overstaffing and understaffing 2. Ensure the organization has the right employees with the right skills in the right places at the right times 3. Ensure the organization is responsive to changes in its environment 4. Provide direction and coherence to all HR activities and systems 5. Unite the perspectives of line and staff managers B. Having too many employees causes a loss of efficiency in operations. Having too few employees results in lost sales revenue and future customers who turn to competitors. C. Organizations need to anticipate the kinds of employees needed in terms of skills, work habits, and personal characteristics so that the best employees are hired, fully trained, and prepared to deliver peak performance. D. HR planning forces an organization to speculate and assess the state of its environment. Anticipating and planning for environmental changes permits staying one step ahead of competitors. E. HR planning sets the direction for all other HR functions. It also ensures that the organization takes a systematic view by understanding the interrelatedness of HR programs and systems; and how changes in one area may impact another area. F. HR planning requires input and cooperation of all managers within the organization. Communication between HR staff and line managers is essential for the success of any HR planning initiatives. G. Cost and Xerox Europe examples illustrate promoting from within as a viable workforce planning strategy. IV. TYPES OF PLANNING A. Aggregate Planning anticipates needs for groups of employees in specific jobs and the general skills employees required to ensure sustained high performance. Forecasting demand for employees is often based on demand for the product or service. This approach is responsive to marketplace needs, but can also easily lead managers to overestimate their own unit needs. 1. Top down forecasting involves senior managers allocating a budgeted amount for employee payroll expenditures and then dividing the pool at subsequent levels down the hierarchy. There is no guarantee that this will be responsive to the needs of the marketplace. 2. Adequate supplies of employees must be available to meet demand. Organizations need to estimate the actual number of employees required and determine the necessary skills. A skills inventory is useful to assess abilities, skills and experiences. 3. Markov analysis utilizes a transition probability matrix that is based on historic mobility trends to determine supply versus demand of human resources. Also helpful is identification of problem jobs or departments, especially relative to turnover. Thus, labor shortages and surpluses can be identified. 4. EXHIBIT 5.3: STRATEGIES FOR MANAGING EMPLOYEE SHORTAGES AND SURPLUSES. 5. Example of the University of Maryland, Baltimore illustrates how the organization developed and utilized furlough and salary reduction plans to avoid layoffs in the light of state budget cuts. The effective management of these programs surprisingly resulted in no increase in the turnover rate of affected employees. B. Succession Planning involves identifying key management positions that the organization can not afford to have vacant. Purposes include facilitation of transitions when jobs become vacant and identification of development and career planning needs of high-potential employees. 1. Utilizes a replacement chart (EXHIBIT 5.4: SAMPLE REPLACEMENT CHART), which identifies key positions, possible successors and suitability of their background to assume the responsibilities, and amount of time necessary to prepare the successor. 2. Replacement charts may contain specific skills, competencies, and experiences. This provides feedback to employees regarding critical training and development needs of individual managers, as well as the organization as a whole. 3. EXHIBIT 5.5: GUIDELINES FOR EFFECTIVE SUCCESSION PLANNING • Tie into organization’s strategy (and modified accordingly) • Monitor the progress and measure outcomes of succession planning initiatives • Ensure that all HR functions that impact the succession plan are iterated and working in tandem • Ensure centralized coordination of succession planning • Engage and involve managers throughout the organization 4. EXHIBIT 5.6: PROS AND CONS OF DISCLOSING SUCCESSION PLANS. 5. Twenty percent of CEOs of the 200 largest corporations in America were replaced in one recent year, and average CEO tenure currently is less than three years. See Succession Planning at Eli Lily, Dole Foods and General Electric examples. V. MENTORING A. Mentoring involves an experience executive or manager assuming responsibility for the development of a lower-level employee. Ideally they mesh the individual development needs of the employee with the workforce development needs of the organization. B. Selection of mentors should be done carefully and consider both technical and interpersonal skills. C. Mentoring programs may be both formal or informal. Regardless of how they are delivered they should be monitored closely with an awareness of diversity. VI. CONCLUSION A. Effective human resource planning is a key component for developing HR strategy. HR planning involves translating corporate-wide strategic initiatives into a workable plan to identify the people needed to achieve objectives. B. HR planning is needed to ensure growth is properly managed. Focused HR planning allows HR functions to contribute to organizational effectiveness. C. HR planning facilitates several key processes, including 1. Leadership continuity through succession planning. 2. Strategic planning by examining the future availability of employees and their skill sets. 3. An understanding of shifts and trends in the labor market through an examination of job requirements and employee capability, which helps the organization remain ahead of competitors. 4. Employee development by determining the skills needed to achieve strategic objectives, as well as to ensure future career success. 5. Budget planning and resource allocation by determining employee needs in response to the organizational strategic plan. 6. Efficiency by estimating future employee surpluses and shortages. 7. Organizational adaptation to its environment. READINGS Reading 5.1 – Designing Succession Planning: Lessons from the Industry Leaders The authors argue that too little attention has been paid to the inclusion of gender and racial diversity in succession planning. Typically organization have utilized one of three approaches to managing diversity; • an assimilation view that downplays differences; • an access view that focuses on building diversity in order to gain access to ethnic consumer groups; • an integrated view that emphasizes uniform performance standards, personal development, openness, acceptance of constructive conflict, empowerment, egalitarianism, and a nonbureaucratic structure that encourages challenges to the status quo An integrated approach combined with a culture of inclusiveness are needed to ensure diverse succession planning. Commitment from and direct involvement by the CEO and senior leadership team are mandatory for diverse succession planning. Employees should be encouraged to look upward in the organizational hierarchy to indentify people who are like themselves. Specific programs which target women and minorities are needed to bring about change in the status quo as they may not see people like themselves in positions higher than the one they hold. Cross-race mentoring requires that mentors have skills related to understanding diversity. Cross-gender relationships need to be carefully managed to prevent any perceptions of impropriety. Organization’s such as Denny’s have made thresholds of representation of minorities and women in management a key component of executives’ annual bonuses. Reading 5.2 – The Annual HR Strategic Planning Process: Design and Facilitation Lessons from Corning Incorporated Human Resources This article explores the creation and evolution of the annual strategic HR planning process at Corning. This system is designed to prioritize HR investment and ensure that HR services are aligned with strategic business needs. It results in a one-page Annual Operating Plan with supporting objectives which are used to track progress toward goals. As part of the planning process, four transformation goals were developed which guide the organization’s growth. (see Figure 1) These goals resulted in a four-step process which gave business unit generalists comment tools land language for translating strategies into action steps for talent development and allow consistency and comparison for prioritization across business lines (see Figure 2) Corning’s annual strategic planning process for HR brings together several key components including: (a) corporate strategy and the implications of that strategy for HR, (b) HR function strategy including the strategic direction for each of the COEs, and (c) the outputs of the Human Capital Planning process for each of the business units, which is essentially the HR implications of each of their business strategies. (see figure 3) Chapter 6 Design and Redesign of Work Systems A. OVERVIEW This chapter discusses the importance of proper design and redesign of work systems. Job duties and characteristics are taken into account when jobs are designed. Environmental and organizational change can serve as a catalyst to redesigning work systems. Organizational change can be difficult, and may be resisted by some, but must be managed effectively to facilitate organizational performance. Outsourcing of some HR functions can make sense for organizations, and can bring a higher profile to HR managers as they assume less operational and more strategic duties. Certain critical HR functions should remain internal to the organization. B. LECTURE OUTLINE I. OPENING CASE – JOHNSONVILLE SAUSAGE Based in Kohler, WI, Johnsonville is a family-owned business which involves its “members,’ as opposed to employees in all aspects of its business. All employees are required to learn about the entire business from the time of hire, largely facilitated by a series of workshops which cover everything from company history and culture to understanding financial statements and how the work of individual teams effects profitability. Individual members are even empowered to shut down the production line at any time, without supervisor approval, if they sense any kind of problem. Monthly bonuses are tied into production and profitability goals. Annual turnover rate is 8% compared to the meatpacking industry average of 20% II. DESIGN OF WORK SYSTEMS A. A MODEL FOR THE DESIGN OF WORKSYSTEMS (Exhibit 6.1) presents three considerations for decision makers: what workers do, what workers need, and how jobs interface with other jobs within the organization. B. One of the more challenging tasks is allocating specific tasks and job responsibilities to employees. Employees should have sufficient work to keep them both productive and motivated. However, employees should not be overwhelmed by their jobs. C. Assess the skills, knowledge, and abilities required by the organization to design jobs and work systems. Work systems should constantly be assessed and evaluated to ensure that organizational objectives are achieved. D, Job specialization allows workers to specialize in particular tasks and gain competence, but can result in creating jobs that are boring and monotonous for employees. Job specialization is appropriate for organizations that require high levels of efficiency and minimization, but also for organizations that employ workers who do not seek to grow and be challenged. E. Job enlargement increases the number of tasks, activities, or jobs to alleviate boredom of specialized work. This does not necessarily provide employees with more responsibility. F. Job rotation rotates workers across different specialized positions within the organization. This helps employees develop through exposure to different roles and functions. HR executives need to “learn the business” by participating in and learning about the organization and its various units. G. Job Enrichment increases the responsibility of employees, who become accountable for their own performance. Vertical loading is the process of reassigning responsibilities of supervisors to employees. H. Exhibit 6.2 THE JOB CHARACTERISTICS MODEL which describes core job dimensions associated with certain critical psychological states and personal/work outcomes. I. Increasing emphasis being placed on competencies and competency models. Difficult and time-consuming to develop but adaptable to changes in the organization’s strategy and can have specific behavioral components built in. J. Design of work systems needs to consider what workers want or need to ensure that they are motivated, productive and happy. Demographics and lifestyles of the labor market have changed. Employees no longer have generic needs, with worker needs varying across different age groups, genders, races, religions, abilities, sexual orientation and marital status. This creates a significant challenge for allocating work in organizations. K. Work/life balance is important to employees, and must be recognized by the organization. Employers that do not allow employees to have balance will find that the workers are less committed and may also suffer from burn out. Employers are establishing stress management, along with physical health and wellness programs, to ensure that employees retain an essential balance among their life activities. Flexible Work at State Street example. L. Representation, or “voice” is important in work systems design, ensuring employees have sufficient voice to allow them to contribute their expertise. Systems for employee input are motivational, allowing utilization of existing capabilities by encouraging employees to get involved in workrelated issues. M. Workplace safety ensures work systems and jobs designed so employees can perform their jobs without any undue risks. N. Three traditional types of task interdependence: 1. pooled – individual employees can work independently of each other in performing tasks, but utilize some coordination of their activities. 2. sequential – individual depends on the timely completion of quality work from another coworker. 3. reciprocal – employees process work so that its flow is not predictable and spontaneous to suit an immediate situation. Employees need to be flexible and are often a team, with joint and shared responsibility. III. STRATEGIC REDESIGN OF WORK SYSTEMS A. Redesign of work systems represents one of the most radical yet common changes taking place in organizations from an HR perspective. B. Reengineering of jobs is necessary in order to respond to, among other things, changes in technology and the increased use of teams and project groups. C. Matrix organization structure being utilized with increasing frequency. D. Employees typically go through a life cycle, presented in Exhibit 6.3 which addresses critical psychological and motivational states which may affect performance and productivity. E. Outsourcing involves contracting non-core work activities to outside specialists, hopefully for less than it costs to do the work in-house. F. 75 percent of organizations outsource at least one HR function. This is a benefit for HR because it allows HR staff to focus more on strategic issues. G. Outsourcing contractors can provide cost savings relative to labor, though they are limited by laws that mandate minimum wages and/or by forces of supply and demand relative to market value of certain skills and competencies. H. Offshoring involves exporting of tasks and jobs to countries where labor costs are significantly less than costs in the United States. These jobs are often computer programming, back-office accounting, and customer service call centers. Offshoring has presented a challenge to organizations via means of managing virtual global teams. It is a controversial practice. I. Exhibit 6.4 presents some of the advantages and disadvantages of offshoring. V. MERGERS AND ACQUSISITIONS A. Merger and acquisition activity has grown substantially over the years, and requires significant HR activity to support the transitions involved. See The Human Side of Creating AOL Time Warner example. B. Exhibit 6.5: HR’S ROLE IN MERGERS/ACQUISITIONS, which examines the role of HR before the deal, during the due diligence process, as part of integration planning and implementation. VI. TECHNOLOGY A. Impact of Technology - constant advances in technology and work processes pressure HR administrators to balance financial consideration of technology adoption with a number of specific strategic HR issues B. Exhibit 6.6 ISSUES FOR INTEGRATING NEW TECHNOLOGIES 1. Strategic Issues - Impact on productivity; quality, timing and delivery of output; equipment/technology costs; adequacy of current facilities; new market opportunities 2. Strategic HR Issues - Necessary workforce expansion and contraction; training; hiring/severance/training costs; effective change management; work group dynamics impact C. Exhibit 6.7 IMPACT OF TEACHNOLOGY ON ORGANIZATIONS Technology impacts how work is organized and the organizational structure, requiring changes in employee work habits and skills; elimination of some lower level positions and layers of management; less hierarchy and more collaboration 4. HR ISSUES AND CHALLENGES RELATED TO TECHNOLOGY - Technology has created three new areas of HR concern 1. Telework - 19.6 million Americans in 2000 and growing strongly. Benefits include: useful as a retention aid/organization can retain investment in person; creates recruiting flexibility; increase in production. Limitations include: lack of “face time”; must develop a clear performance measurement system; how many and which employees will be offered/required to use telework; expense; liability issues; technological feasability assessment required. Examples - Telework at Deloitte, the U.S. Patent and Trademark Office and at Merrill Lynch 2. Employee Surveillance and Monitoring - employees often use work time for personal business and entertainment, with an increasing number of employers implementing electronic monitoring of employee activity, such as tracking Internet usage. Can create serious privacy concerns, influence employee morale and loyalty. See the Electronic Communications Privacy Act of 1986. 3. E-HR - range and scope of HR e delivery has expanded greatly. Time Warner Cable uses kiosks at its many locations to deliver HR services. City of Dallas uses direct deposit or issues debit cards instead of paychecks. American Airlines “Jetnet” program greatly reduces costs, provides timesaving conveniences. 4. Social Networking – employers can reap benefits of social networking to promote communication, particularly among remote workers. Can be done through public social networking sites such as facebook or on an organization’s in-house intranet. Example – Social Networking at Capital One and at 7-Eleven. VII. UNDERSTANDING CHANGE A. Pressure to change can be a constant force in organizations. Change initiatives are often met with resistance. B. Costs of change can encourage resistance. Change involves disrupting the status quo and entering areas of uncertainty, and involves commitment of resources that could be deployed otherwise. C. Failure to perceive any benefits for themselves adds resistance to change for those involved with and impacted by the change efforts. D. Risk and the uncertainty inherent in doing something differently also encourage resistance to change. There is no assurance that change will result in higher performance, greater efficiency, better working conditions, or improved morale. E. Poor coordination and communication can reduce the acceptance of change. Managers often refrain from informing workers about new projects and programs that are being considered or developed. Misinformation not refuted by managers can result in the departure of employers who may sense a threat to their jobs. VII. MANAGING CHANGE A. Promote benefits to users. Work redesign strategies need to consider the employee perspective on how changes will improve work and organizational life for them. B. Promote and invite participation. This helps create buy-in to the changes. C. Two-way communication facilitates change. Employee input is not only motivating and beneficial, but communicating with employees also fosters an atmosphere of trust and allows the organization to determine where resistance might lie prior to implementation of change, rather than after. VIII. CONCLUSION A. The changing nature of work requires organizations to strategically manage change as part of work design and redesign. B. Organizational restructuring is risky, with no guarantee of success. C. Successful job restructuring involves: 1. Skills training and continuous learning 2. Increased employee participation 3. Flattened organizational structures 4. Labor-management partnership 5. Compensation linked to performance READINGS Reading 6-1: Using Outsourcing for Strategic Competitiveness in Small and Medium-sized Firms Outsourcing originated in the manufacturing sector but has spread and is growing widely in the service sector. 80% of Fortune 500 organizations outsource into a $386 billion annual market. Most outsourcing has been done by larger firms yet small and medium-sized organizations can take advantage of outsourcing to enhance their competitive advantage. An outsourcing matrix is presented which considers organizational activities by strategic importance (core or non-core) as well as by outsourcing role (supplementary or complementary). Supplementary outsourcing is that which leads to the replacement of an activity being conducted within the firm while complementary outsourcing leads to supporting an activity being done within the firm so that its delivery become more effective. The outsourcing matrix hence provides three opportunities for outsourcing, as presented in Figure 1. Cell 1 outsources non-core supplementary activities and provides enhanced efficiency Cell 2 outsources non-core complementary activities and provides synergy and legitimacy Cell 3 outsources core complementary activities and enhances activities of strategic importance Cell 3 outsourcing is more risky than that of Cells 1 or 2 Reading 6-2: Monitoring Employee E-mails: Is There Any Room for Privacy? This reading explores the justifications for employers’ e-mail monitoring along with an analysis of supporting statutory and case law, Web-based private e-mails, and international implications of e-mail monitoring. It also provides evidence of work outcomes of e-mail monitoring regarding employee attitudes and behaviors such as organizational commitment, job satisfaction, and performance. Employers generally assume the expense and effort associated with monitoring employee e-mails for three reasons; (a) protecting the firm from liability risks, (b) protecting company assets, and (c) ensuring job performance. Employees and employee advocates have raised privacy concerns around this monitoring but, to date, employers have prevailed in every case in which they have been accused of violating employee privacy rights. This is true even when employees access web-based e-mail accounts at work on employer-provided equipment. However, attempts to monitor personal e-mail accounts accessed through personally-owned telecommunications devices may run afoul of the Electronic Communications Privacy Act of 1986. An interesting challenge for multinational employers is the different social norms regarding privacy in other countries. Employers can face more stringent conditions on monitoring employee e-mail and different cultural expectations about privacy, particularly in the European Union. For example, in the United States, privacy can be viewed as a commodity, meaning that it can be bartered away when individuals feel it is in their interests to do so. In Europe, however, privacy is viewed as more fundamental, something that persons cannot be induced to forfeit. There can also be behavior and performance consequences associated with monitoring. Monitoring could affect employee feelings of trust toward the employer and result in feelings of degradation, stress and frustration. This, in turn, can effect employee engagement and commitment, leading to increased voluntary turnover and decreased performance. In sum, e-mail monitoring needs to carefully consider the ultimate impact it will face on employee attitudes, behavior and performance in addition to both legal mandates and ethical considerations. Even though domestic employees find limited to no legal protection for claims of invasion of privacy, the ultimate impact on the trust relationship between employees and employers and its consequences can be significant. Chapter 7 Employment Law A. OVERVIEW This chapter provides an overview of U.S. employment law, particularly from the federal point of view. These laws are often complex and ambiguous, thus employers must be diligent in their efforts to protect individuals in their workplace by ensuring that HR practices are in sync with applicable laws. Equal Employment Opportunity Commission (EEOC) is charged with enforcement. Affirmative action also provides for employment discrimination remedies, although they are often controversial and can result in reverse discrimination. The basic tenets and challenges of sexual harassment management are also discussed. B. LECTURE OUTLINE I. OPENING CASE – Racial Harassment at Lockheed Martin. The EEOC facilitated a settlement with the Fortune 100 corporate and world’s largest military contractor which paid $2.5 million to an employee who had complained about racial discrimination and harassment and terminated four coworkers, including the supervisor, who perpetrated the harassment. Lockheed was also required to provide annual anti-discrimination training to all employees and prepare special annual reports to the EEOC regarding any allegations of discrimination which were handled in-house. II. INTRODUCTION Employers are faced with adhering to complex, and often ambiguous, employment laws. Enforcement of employment law can be costly and time-consuming, but necessary to protect the employer and employees. This chapter primarily deals with federal laws that protect individuals from unfair treatment in the workplace. Employment law requires HR practices that fit within the context of applicable laws in order to avoid significant costs (both monetary and reputation) of noncompliance. III. EMPLOYMENT-AT-WILL Doctrine developed as part of British common law which states the employment relationship should be a private matter between employee and employers, terminable by either part at any time for any reason or no reason whatsoever. Applies to the majority of the workforce in the United States with the major exceptions of 1) a collective bargaining agreement, 2) an express written contract, 3) terms of implied contracts, 4) judicially determined “public policy exceptions” and 5) federal, state and local statutes which prohibit discrimination in employment against given specified protected classes. IV. SCOPE OF LAWS Federal employment laws apply to all 50 states and other jurisdictions. State and local laws add another layer - and these laws often differ from federal laws. Employers often “discriminate” by noting a distinction of an applicant (such as prior experience or education level). Discrimination is not illegal unless Congress, or other governmental bodies, defines such actions as illegal and determines a “protected class.” V. FEDERAL ANTI-DISCRIMINATION LAWS A. Civil Rights Act of 1866 - gave all citizens the right to enter in to contracts as “white citizens”. However, there was no enforcement or remedies for unjust treatment. Congress passed Civil Rights Act of 1871, giving individuals the right to sue for deprivation of civil rights under terms of the 1866 act. B. Equal Pay Act of 1963 - prohibits wage discrimination based on sex or gender for jobs that require equal skill, effort and responsibility, and are performed under similar working conditions. Realistically, women still make 70-75 cents on the dollar of their male counterparts, primarily due to four exclusions in the law. These include a bona fide seniority system; differences in quality of performances; piece rate pay plans; factors other than sex. C. Civil Rights Act of 1964 - often referred to as “Title VII,” this act prohibits employment discrimination based on race, color, religion, sex and national origin, including hiring, firing, promotion, transfer, compensation, training. Applies to all private employers with 15 or more employees; state/local governments; colleges/universities; employment agencies; and labor unions. Established EEOC to oversee Title VII. Examples – Racial Discrimination at Coca-Cola and Sex Discrimination at Novartis. D. Age Discrimination in Employment Act of 1967 - prohibits employment discrimination against people over 40; prohibits setting of mandatory retirement age, except in some occupations dealing with public safety. Applies to all Title VII employers and federal government. Example – Age Discrimination at 3M. E. Rehabilitation Act of 1973 - prohibits discrimination by organizations. With federal contracts. Employee must be “otherwise qualified” for the job. Provides for “reasonable accommodations”, usually decided case-by-case. F. Pregnancy Discrimination Act of 1978 - prohibits employment discrimination against pregnant employees. Pregnancy must be treated like any other medical disability. Employer cannot refuse to hire pregnant person, or provide health insurance that does not cover pregnancy. G. Americans with Disabilities Act of 1990 - extends 1973 Rehabilitation Act. Covers all public and private employers with 15 or more employees. Seen as ambiguously worded and open to interpretation, resulting in much litigation with a wide latitude of outcomes. The ADA was amended in 2009 (ADA Amendments Act of 2008) and expanded both the protection offered for individual with disabilities as well as the definition of who would be covered under the ADA. Example – Employees with Disabilities at IBM. H. Civil Rights Act of 1991 - extends 1964 act by extension to federal government employees; allows for compensatory and punitive damages; heavier burden of proof on employer; extraterritorial enforcement; has resulted in increase of Title VII filings with EEOC. I. Family and Medical Leave Act of 1992 - provides for up to 12 weeks of unpaid leave for the birth, adoption, or serious illness of a child family member or the employee. Covers organizations with 50+ employees. Provides for employees to return to same or equivalent position. Not as generous as European laws, perhaps due to cultural/family perspective differences. Challenges abound as state leave laws are often more generous than the FMLA, expressly cover medical conditions which are not included under the FMLA and vary from state to state. J. Genetic Information Nondiscrimination Act of 2008 – prohibits the use of genetic information in decisions related to health insurance and employment. Employers need to utilize extreme caution in collecting information about employees which could give rise to a GINA claim. VI. ENFORCEMENT OF FEDERAL LAWS UNDER THE EEOC - Exhibit 7.1: EEOC COMPLAINT PROCESS. A. In general, a complainant must first establish disparate treatment or impact, which shifts the burden to the employer to provide a legally justifiable, nondiscriminatory reason for the action in question. B. Four ways an employer can rebut a prima facie case are through showing job-relatedness; a bona fide occupational qualification; bona fide seniority system; or “business necessity.” VII. AFFIRMATION ACTION A. Executive order requires affirmative action plans from organizations with 100 or more employees and $50,000 or more in federal contracts in order to assure that the workforce is representative of the society where the business operates. B. Presupposes enforcement is necessary in order to treat fairly individuals of protected classes and to rectify past injustices C. Is controversial in that “reverse discrimination” often occurs, but proponents argue its necessity because society will not dismiss from consideration personal characteristics that are not job related. D. Affirmative action plans are filed with the Department of Labor, and contain four separate sections: utilization analysis; availability analysis; problem identification; corrective action. VIII. SEXUAL HARASSMENT A. Court decisions affirm that same or opposite sex sexual harassment is a form of sexual discrimination under Title VII. B. One of the more challenging aspects of legal compliance; claims are often subjective in nature - uses “reasonable person” standard C. Sexual harassment claims can be costly from a money, public relations and employee morale points of view. D. Key concepts include advances of an unwelcome nature - behavior is considered offensive and inappropriate; nature of harassment - quid pro quo or hostile environment; pattern or isolated incident?; was relationship consensual?; allegations must be provable and verifiable. E. Sexual Harassment at Dial example. F. Problems in managing sexual harassment include: workers/managers are not aware of what sexual harassment is; not aware of sexual harassment policy or what it says; employees often fear retaliation for reporting; how best to investigate. Exhibit 7.3: PROBLEMS AND CHALLENGES IN MANAGING SEXUAL HARASSMENT. G. Exhibit 7.4: GUIDELINES FOR MANAGING SEXUAL HARASSMENT IN THE WORKPLACE. Mainly, have an unbiased, thorough investigation that ensures fair treatment and no retaliation; apply processes and policies consistently and document everything; take prompt action. Example – Sexual Harassment at Tyson Foods. H. Complications abroad - not all cultures recognize sexual harassment IX. TRENDS IN EMPLOYMENT LITIGATION A. Blatant to subtle discrimination B. Use of electronically produced and stored evidence C. Increasing complaints of employer retaliation D. More expeditious employer settlements E. Use of employment practice liability insurance (EPLI) F. Language rules in the workplace X. CONCLUSION A. Employment laws are numerous, complex and ambiguous, with many managers uninformed or ill-prepared to manage. B. Decentralized decision making processes often put line managers in position to interpret, administer employment law. C. Employment law is likely the most difficult HR concept to manage. READINGS Reading 7.1 - In Defense of Preference This reading reflects on the principle that ability, qualifications and merit, independent of race, national origin or sex, should be the guide in employee selection and promotion, as well as admission to selective higher education programs. According to the author, the reality is that strict adherence to the principle would result in very few African Americans getting jobs, admissions and contracts. This is largely due to significantly different levels of educational performance (and other indicators used in selection processes) between black and white students. If true colorblindness criteria are employed, then the result may be the effective exclusion of African Americans from “...positions of influence, wealth and power.” The author asserts that we are finally seeing the majority sentiment against preferences emerge, basically due to changes in the makeup of the Supreme Court; circuit court rulings, and backlash to Californian efforts through Proposition 209 to insert into the state constitution wording of the Civil Rights Act of 1964 (which bans discrimination on the basis of race, national origin or sex). The reading particularly looks at the influence of affirmative action on admissions to selective higher education programs. The history of affirmative action and preferences at the University of Texas Law School is chronicled, along with related legislative and court actions. Across the U.S. black students still lag behind white students on the SAT test, prompting some institutions to institute new admissions criteria that de-emphasizes such testing, and other criteria that might limit black students meeting admissions requirements. Thus, the author questions in a tongue-in-cheek way whether qualifications at the time of admission really matter. Many may have believed that decades of compliance to anti-discrimination laws and affirmative action should have erased gaps between blacks and whites, but the author suggests they have not. Most would agree that banning of preference would be a bad idea along many fronts, and that diversity brought to select institutions of higher education by black students is critical. Thus, there appears to be a strong argument that elimination of preferences would mean de facto exclusion of blacks from selective higher education, perhaps not something our society wants to contemplate. Reading 7.2 - The Management of Organizational Justice Organizational justice refers to the extent to which employees feel that they are being treated fairly in organizations. It has been shown to correlate with greater trust and commitment, improved job performance, better citizenship behavior, improved customer service and satisfaction and reduced conflict. Organizational justice is a process which needs to be actively managed. There are three components of justice • Distributive justice – the appropriateness of outcomes • Procedural justice – the appropriateness of allocation processes • Interactional justice – the appropriateness of how employees are treated by superiors Table 1 illustrates the individual components of each of these types of justice Perceptions of justice are influenced by • selection procedures • compensation and reward systems • conflict resolution techniques • downsizing activities • performance management systems Chapter 8 Staffing A. OVERVIEW Staffing is a key strategic HR activity which significantly impacts organizational profitability. Recruitment and selection issues are discussed, including interviewing, testing and references. The outsourcing of staffing functions can present both benefits and costs to an organization, and must be analyzed appropriately before implementing. International assignments, as well as diversity issues, are becoming more important in managing the staffing function. B. LECTURE OUTLINE I. OPENING CASE - Kroger Co. improved its continuous selection process by developing an efficient and cost-effective computer based, self administered employee selection system that emphasizes identifying customer service oriented individuals. Its measures of success are customer service measures, turnover rate and employee safety. II. INTRODUCTION A. Staffing decisions are extremely important to the vitality and profitability of an organization, as turnover can cost more than $10,000 per person, and tends to rise as the level and complexity of the job increases. Job trends that influence staffing include broader scope and responsibilities; leaner staffing; fewer full-time employees; pay for company performance; flatter organizations. Staffing is extremely important in the service sector in that different skills are needed than in the manufacturing sector, and higher turnover must be appropriately managed. III. RECRUITING A. Organizations must decide between temporary and permanent employees based on projected job need, cost and employee usage B. Outside temporary employees hired from agencies or through subcontracting earn no benefits; cannot file for unemployment when the job ends; can be more expensive to utilize; offer much staffing and cost flexibility C. Organizations can have their own in-house temporary workers that are useful as floaters from department to department as work dictates. D. Exhibit 8.1: ADVANTAGES AND DISADVANTAGES OF INTERNAL AND EXTERNAL RECRUITING. Internal recruitment affords time to observe employee; can motivate employees; reduces training and socialization time and costs; useful when organization is following a stability strategy. 1. Disadvantages include chance for political/partisan actions and dysfunctional conflict; diminished morale and performance for those not selected; inbred staff can encourage maintenance of the status quo and reduce creativity inefficiencies by creating multiple vacancies. Example – Internal Recruiting at Cisco Systems. E. External recruitment facilitates change and is useful when organizations face change or a volatile environment. 1. Disadvantages include expense and time; longer socialization; individuals are more of an unknown; can reduce internal morale. 2. External recruiting can utilize an active or passive approach. The former is more strategic in nature and targets candidates who may not be actively looking for a new position. F. Exhibit 8.2: RECRUITING PYRAMID. HR must determine how large a recruitment pool is needed and when to do recruitment. Can create their own pyramid based on organizational historical data. G. Exhibit 8.3: RECRUITMENT TIMELINE. Timeliness in the recruitment process is very important. H. Recruitment methods are often informal for smaller organizations. Larger organizations often rely on targeted advertising in selected media. 1. The internet is increasingly important in recruiting, with 70% of HR departments utilizing it and 75% of students recently indicated usage. This allows for global exposure and access, reduces costs. 2. Networking is used by 78% of job seekers, but network usage is much lower among recruiters. 3. Internships are an increasingly popular method of recruiting entrylevel employees but employers need to ensure that they do not run afoul of any federal labor laws when employing interns. 4. See Outsourced Recruiting at Kellogg and College Recruiting via Internships at Microsoft examples. IV. SELECTION A. Selection decisions can have significant economic and strategic consequences, and thus must be made with care. Methods must be both reliable and valid, with reliability a prerequisite for validity. 1. Reliability refers to the consistency of the measurement being made across time and across evaluations. 100% reliability is rare, as too many factors can impact assessment. Low reliability often comes from two sources: a. Deficiency errors occur when an important criteria for assessment is not included. b. Contamination errors are the result of unwanted influences, such as time constraints on the interviewer. 2 Validity refers to whether what is being assessed relates or corresponds to actual performance on the job, and is critical to insure proper selection. Validity can become the chief measure to defend discrimination allegations. a. Content validity illustrates that the measure or criterion is representative of actual job content and desired knowledge needed to perform the job. b. Empirical or criterion-related validity measure demonstrates the relationship between certain screening criteria and job performance. B. Who will be involved with interviewing applicants must be determined, and might include prospective immediate supervisors, peers and subordinates; whether interviews will be conducted in group or individually; and either structured or unstructured format. 1. Subjective assessments of applicant qualifications are part of the interviewing process, with interpretation errors common, perhaps including: similarity, contrast, first impression or halo errors, or biases based on applicant race, gender, religion, age, ethnicity, sexual orientation, etc. 2. Behavioral interviewing relies on the assumption that past behavior is the best predictor of future behavior. It reduces employer liability as it focuses on specific behaviors which are considered essential for successful job performance. Examples of behavioral interview questions are presented in Exhibit 8.4. 3. Virtual interviewing is becoming more popular with many employers. It is more cost and time-effective than in-person interview and is more personable than a telephone screening interview. C. Testing appropriateness and timing in the screening process must be decided, with work sample and trainability tests common and helpful in presenting a realistic job preview. Other testing might include personality testing, although it has been successfully challenged in court; physical testing, usually after a job offer in order to comply with the Americans with Disabilities Act; honesty testing, which has declined in usage since passage of Employee Polygraph Protection Act of 1988; drug testing has been challenged in courts, but there is no federal right-to-privacy statutes that prohibit testing of on or off the job drug use by employees; personality testing should be utilized with extreme caution; physical testing can be conducted only after a job offer has been made. Establishing jobrelatedness is critical for any kind of testing. C. Checking of references should include other individuals than those named by the applicant. Increasing liability for libel, slander and defamation of past employees has resulted in more organizations refusing to comment on past employees, other than to verify employment, dates, position held and salary history. D. Many employers are now using social media sites to check candidate backgrounds. This practice can be risky for a number of reasons. V. INTERNATIONAL ASSIGNMENTS Selection of employees for overseas assignments can be difficult, as many such assignments fail. Technical ability, a traditional selection criterion for overseas assignments, is necessary, but not sufficient in this selection process. Interpersonal and acculturation abilities of both employees and their families are critical, with lack of ability to adapt one of the most common reasons for failure of international assignments. VI. DOCUMENTATION OF EMPLOYMENT ELIGIBILITY Extra caution has to be made when hiring foreign-born employees to ensure the legitimacy of any documentation they might provide. This is particularly true for low-skilled workers who may have limited English language abilities. There is no widespread reliable system for verification. If documentation is suspect but later found to be valid, employers can face unlawful discrimination charges. Supply of and demand for low-skilled workers almost necessitates the hiring of foreign-born workers. For those foreign-born workers who have not obtained citizenship, employers must first prove that there are no domestic workers with the requisite skills available. VII. NEW TRENDS IN STAFFING Employment branding – creation of an image which allows prospective employees to view the organization in a certain way and aid in recruitment. Example – Employment Branding at W. L. Gore. Candidate relationship management – building a relationship with prospective employees which transcends a specific hiring cycle and process to keep interest high among high-potential employees. Example – Candidate Relationship Management at Whirlpool. Applicant/organization fit –employers going beyond skills and experiences to determine whether applicant interpersonal styles and preferences appropriately matched with organization culture. VIII. CONCLUSION The staffing function is critical to employing individuals who are capable and desire to contribute to organizational mission. Effective staffing strategy requires indepth planning for efficient recruiting to generate a qualified applicant pool. Exhibit 8.6 covers STRATEGIC ISSUES IN STAFFING. Deficient staffing will impair HR programs and policies. READINGS Reading 8.1 – Temporary Help Agencies and the Making of a New Employment Practice This article discusses the evolution of the use of temporary employees and temporary help agencies. Traditionally this labor market consisted almost exclusively or married women, often with some family care responsibilities, who lacked viable alternatives for employment. Temporary employment has evolved to become more widespread and normalized with almost 3 million temporary employees hired each day. The use of temporary employees has evolved from a stopgap means of filling a job to a strategic staffing choice available to organizations. Uncertainty around demand for a company’s products or services can result in employer reluctance to hire permanent employees. Employees can also use such temporary assignments to build their skills and resumes and for networking, in addition to “sampling” a job and/or employer prior to make a full commitment of “permanent” employment. Temps today are split approximately 50% by gender and also found at all levels of organizations, including senior/ executive management. The growth and evolution of the temp industry can be traced to the strategized efforts of the temporary employment industry. Aggressive marketing of services, release of employer liability for workers, the promotion of the advantages of such flexible workforce expansion and contraction and public relations aimed at media perceptions and portrayals of the industry and temps workers in general all contributed to how temporary employment was considered. Temp agencies themselves developed operational standards of selective recruitment, extensive screening and stronger efforts to ensure “fit” between assignments and employees. Reading 8.2 – Assessment Instruments for the Global Workforce One of the greatest challenges faced by global employers is selection of employees for overseas assignments. Assessment of competencies and readiness of potential employees for foreign assignments is essential to ensure that appointments are successful for both the employee and the employers. The costs of failed international assignments, both monetary and non-monetary, are astronomical hence, careful selection procedures are paramount. Factors, beyond technical competence, which are related to success in global business include 1. Action orientation (conscientiousness) 2. Flexibility 3. Emotional stability 4. Openness (open-mindedness) 5. Sociability (extraversion, agreeableness) 6. Cultural empathy (cultural sensitivity, cultural intelligence) Successful global managers need “global competence,” defined as 1. Knowledge of one’s own and other pertinent cultures 2. Recognition of specific differences between cultures 3. Understanding of how culture influences behavior in the workplace 4. Ability to empathize with, adapt to and/or manage differences, as expressed in business structures, systems and priorities, within multicultural work environments Instruments are available to assess global managers’ adaptability as well as to facilitate their development Instruments available to assess adaptability • Cross-Cultural Adaptability Inventory (CCAI) • International Assignment Profile (IAP) • International Personnel Assessment tool (iPASS) Canada • Overseas Assignment Inventory (OAI) • Multicultural Personality Questionnaire (MPQ) Netherlands • Self-Assessment for Global Endeavors (SAGE) Instruments available to assess competence • Global Candidate Assessment (GCA 360°) • Intercultural Development Inventory (IDI) • Survey on Intercultural (Relocation) Adaptability (SIA, SIRA) Instruments available to assess Intercultural Awareness • Argonaut Assessment (AA) U.K. • Cultural Mapping and Navigation© Assessment Tool (CMNAT) U.A.E. • Cultural Orientation Indicator (COI) • Culture in the Workplace Questionnaire (CWQ) • Intercultural Awareness Profiler (IAP) Netherlands • Peterson Cultural Style Indicator (PCSI) Instruments available to assess Intercultural Coaching • Intercultural Readiness Check (IRC) Netherlands • The Spony Profiling Model (SPM) U.K. • The International Profiler (TIP) U.K. No assessment instrument by itself can ensure success. Assessment needs to be considered in tandem with specific performance history and interviews with the employee, co-workers, supervisors, subordinates and family members. Instructor Manual for Accounting Theory: Conceptual Issues in a Political and Economic Environment Harry I. Wolk, James L. Dodd, John J. Rozycki 9781285426792, 9781337619998
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